DT.
You have been taken for fools, dear reader. This Government, the smuggest, most insolent, most supercilious in living memory, keeps lying to you. I’m sorry to use such hard language, but it is the most precise way to describe Labour’s gaslighting of the Great British public.
The Government swore it wouldn’t put up national insurance, and then changed its mind. It promised it wouldn’t put up income tax, and now the Prime Minister is opening the door to doing exactly that, refusing to recommit to his manifesto. The Chancellor pledged she wouldn’t impose a wealth or mansion tax, and is now considering such plans.
What gives Sir Keir Starmer and Rachel Reeves the right to break their promises with such insouciance? Who do they think they are? Don’t they see that another round of tax rises next month will be seen as illegitimate by millions, and trigger an all out-political revolt in a Middle England that is already on edge?
Manifestos and statements must be treated as a sacred pact with voters, contracts only broken in extremis, in the event of natural or man-made catastrophes. No such calamity has befallen us, so the Government has no moral right to increase tax.
The scale of the betrayal is off the charts. In an interview with the Sunday Telegraph in August 2023, Reeves sought to reassure. She and Starmer had previously supported socialist policies – the Labour leader had served in Jeremy Corbyn’s shadow cabinet and promised higher income tax for the top 5 per cent in his leadership campaign – and she wanted to pretend they had changed.
She wanted to reposition herself, if not quite as a Blairite, at least as a “grown-up” technocrat who, by dint of greater competence, moral superiority and buy-in from the Blob, would implement the centrist Dad policies the Tories wanted to pursue, but failed to deliver.
This is what she said: “We have no plans for a wealth tax…We don’t have any plans to increase taxes outside of what we’ve said. I don’t see the way to prosperity as being through taxation. I want to grow the economy.” She added of the prospect of any form of wealth tax: “We won’t be doing that. It’s a denial.”
In response to questioning about the possibility of an annual tax on the value of homes or higher council tax bands, a Labour source added that the denial also applied to “any form of ‘mansion tax’”.
It was clear during that and subsequent interventions that Reeves was promising that the only taxes she would raise were the ones explicitly listed in Labour’s manifesto. When it was published last year, Starmer’s programme included £8.5bn in tax increases, focused on VAT on private school fees, private equity and non-doms, tax avoidance and a windfall tax on oil and gas firms.
Yes, these were immoral and vicious - in the case of the raid on parents – or nasty and destructive, as with the assaults on the “rich”, but at least the damage was meant to be contained.
The manifesto assured us that there would be no bad surprises: “Policies not listed here will be funded from existing budgets or do not have a cost.” It ruled out increasing specific taxes, in addition to the more general pledge: “Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.” Corporation tax would remain at 25 per cent.
No government in modern history has broken so many promises so quickly. The first lies came almost immediately, with the fabricated discovery of a “black hole”, the abandonment of the semi-responsible Tory spending plans and the adoption of unaffordable policies, including pay rises for its electoral base in the public sector.
Reeves raised tax by £41bn a year by 2029-30 at her 2024 Budget, five times more than promised, to part-pay for a £71bn a year increase in spending.
Her core policy was a rise in employer national insurance, a shocking breach of her manifesto that has destroyed jobs. She claimed that only employee NICs were covered by the pledge but that isn’t true. For this alone, Reeves deserves the sack.
She also proved naive. Beneficiaries of public spending pocketed the cash and immediately asked for more. Public sector productivity hasn’t improved (unsurprisingly, as Reeves had no plan for genuine reform), and a record 6.5 million now claim out of work-benefits. Reeves’ modest plan to trim welfare was defeated, and the deficit surged dangerously.
Next month’s Budget will see another round of tax hikes, probably £30-£40bn a year just to prevent a catastrophic fiscal crisis. This time she will likely breach either or both of her pledges on income tax and wealth taxes. She could become the first Chancellor since Harold Wilson in 1975 to raise the basic rate of income tax. She could impose a wealth tax, perhaps in the form of a levy on expensive homes.
The latter would be a catastrophe, entrenching class warfare, ruining the principle of private property and triggering a further exodus of talent; the former would breach a taboo and signal another massive expansion of the state.
The taxes symbolise two sides of left-wing thinking: delusional firebrand populists who believe that the “rich” can be made to pay for everything, and socialist realists, who realise a bigger state can only be funded by forcing the working and middle class to pay a lot more tax, as in France. Both are wrong, for different reasons; Reeves will seek to triangulate between both camps.
Her original lie was the “black hole” she caused herself by ditching Tory plans. Her latest rationalisation of higher tax is equally mendacious, and involves blaming “austerity” (at a time when tax and spend are at historic highs), a “chaotic Brexit” (at a time when Germany is performing even worse than us) and the pandemic (even though Labour was even more pro-lockdown than the Tories).
Reeves’ propaganda will fail. Her tax hikes will kill growth, and fail to raise enough. They won’t placate the Left, who will continue to drift to the Greens, Corbynites and Welsh and Scottish nationalists. They will infuriate working and middle class strivers, who will shift to Reform.
This Government’s epitaph will be written far sooner than it realises, and require only four words: It lied about tax.